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The global airline industry is facing an unprecedented crisis.
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Airlines around the world have grounded large proportions
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of their fleets and announced plans
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to lay off thousands of staff as they attempt
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to survive a shutdown of international travel
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amid the widening coronavirus pandemic.
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Over the course of this week, the outlook for the aviation
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sector has darkened further.
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Air travel has come to a virtual halt across the globe,
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particularly in Europe, as governments have imposed travel
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bans and lockdowns as they look to contain
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the spread of the virus.
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According to the International Air Transport Association,
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the global airline trade body, the coronavirus pandemic
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now covers markets which represent as much as 94
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per cent of global passenger revenues.
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On Monday more than 14 airlines announced new measures
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to slash costs, with some reducing the number of flights
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by as much as 90 per cent.
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But by Wednesday, Ryanair, Europe's largest
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low-cost airline, warned it expected to ground almost all
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of its entire fleet by Tuesday.
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The severity of the crisis has prompted carriers
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to turn to governments for a lifeline.
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The global airline industry has said
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it will need up to $200bn in emergency support
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as it faces a cash crisis in the face of a global lockdown.
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The industry's trade body has warned
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that the majority of airlines face
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running out of money within two months, pointing to the fact
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that a large number of carriers globally are highly leveraged.
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Only about 30 airlines have driven the improvement
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in profitability seen in the airline industry
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over the last 10 years.
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The UK, US, France, Italy, Norway, the Netherlands,
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Russia, and others have all indicated
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they would provide support measures, ranging
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from low-cost loans to tax breaks
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for the struggling airlines.
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But while many countries are likely to offer
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financial support, the question will
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be how many carriers will still be
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able to survive the shutdown in air travel,
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particularly as no one knows when this will end.
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And once it does end, just how quickly
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will travel demand return?
